[leetgirl83]

In 2018, 80% of the TSLA shareholders voted favor of a compensation plan that would pay Elon $56 billion if the company met certain goals.

As of 2023, these goals have been met, and yet, the judge will rule in favor of a shareholder who holds 9 TSLA shares that the plan is excessive and should be voided.

Interesting, isn't it.

[jimkleiber]

> Of course, Tesla shareholders voted for the plan, but the judge found that “the defendants were unable to prove that the stockholder vote was fully informed because the proxy statement inaccurately described key directors as independent and misleadingly omitted details about the process." [0]

I think the argument was that the vote wasn't valid because the the voters weren't properly informed and that Tesla didn't actually try to negotiate too hard to get a better deal for shareholders.

That being said, I have no idea about the law surrounding this stuff, just trying to add more context.

[0]: https://electrek.co/2024/01/30/elon-musk-billion-tesla-ceo-c...

[tmn]

Can anyone make an objective case that this was a bad deal for share holders?

[nocoiner]

I’m not sure what your point is. There’s a well established standard in Delaware for upholding conflicted transactions and the process for cleansing them ex ante. That this particular transaction lifted the tide for all boats doesn’t mean that all, most or even many similarly conflicted transactions result in a positive amount of value creation for non-controlling shareholders.

What I think is more interesting is how the duties imposed on controllers, directors and officers of Delaware corporations are, in my opinion, one of the key factors that have directly contributed to such a massive creation of wealth over most of the past century that $56 billion is a merely a drop in the very large bucket.

Delaware as a venue for capital formation and value accretive corporate norms works so well that I’d think anyone raising third party capital would welcome the enforcement by all shareholders, whether they hold a million shares or just a single one.

[hackerlight]

Hardly. The judge's ruling took this vote into account. Did those 80 percent of shareholders act under the belief that the compensation committee was independent and was making a recommendation in line with that independence? That's the issue. One of trickery and deception and conflicts of interest.